Christopher & Banks (CBK) provides an opportunity to invest in an overlooked specialty apparel retailer with strong normalized earnings power and significant balance sheet strength at a rock bottom valuation. Recent earnings numbers have languished due to the general downturn in discretionary apparel spending as well as company merchandising missteps. A clearly defined turnaround is in progress with new management and a new design team. The company, which is debt free and has half of its market cap in cash, is cheap on an absolute basis and relative to sector peers. I think CBK can potentially generate $60 million in EBITDA with minimal ongoing capex needs while it is currently trading at a $105 million enterprise value. Additionally, a very safe 4% dividend will reward investors while the turnaround plays out.

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